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can you help with 15-21 sorry it,s 15-22 the one that i need help Direct and step-down allocation. E-books, an online book retailer, has two
can you help with 15-21
sorry it,s 15-22 the one that i need help
Direct and step-down allocation. E-books, an online book retailer, has two operating departments, corporate sales and consumer sales and two support departments-human resources and information systems. Each sales department conducts merchandising and marketing operations independently. E-books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2017: 1 4 Home Insert Page Layout Formulas Data Review View A B E F SUPPORT OPERATING DEPARTMENTS DEPARTMENTS Human Information Corporate Consumer 2 Resources Systems Sales Sales 3 Budgeted costs incurred before any interdepartment cost allocations 90,000 227,000 995,000 484,000 Support work supplied by human 5 resources department Budgeted number of employees 20 48 32 Support work supplied by information 7 systems department Budgeted processing time in minutes) 400 2,160 lago 1. Allocate the support departments' costs to the operating departments using the direct method. 2. Rank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments' costs to the operating departments based on the step-down method. 3. How could you have ranked the support departments differently? O AWN 6 8 15-22 Reciprocal cost allocation (continuation of 15-21). Consider E-books again. The controller of E-books reads a widely used textbook that states that "the reciprocal method is conceptually the most de- fensible." He seeks your assistance. 1. Describe the key features of the reciprocal method. 2. Allocate the support departments' costs (human resources and information systems) to the two oper- ating departments using the reciprocal method. Use (a) linear equations and (b) repeated iterations. 3. In the case presented in this exercise, which method (direct, step-down, or reciprocal) would you recommend? Why Step by Step Solution
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